An extract from the Summary section of the presentation is set out for investors in the Appendix to this announcement.
Appendix: Q4 Investor Presentation Extract
Key Quarter Updates
– 12 new deals completed (£172m of commitments) since 31 March 2021, showing strength of opportunity post the initial impact of Covid
– No defaults in the portfolio.
– Successful and favourable completion on the last remaining hotel loan restructuring.
– Migration of portfolio to senior lending in keeping with the compelling opportunity set therein
– Cash reserves remain robust, target at between 5% to 10% of NAV
– Dividends maintained at 3p per quarter, 8.0% annualised yield, based on share price, as at 31 March 2022
• Employs term matched financing, alongside flexible short dated financing
– Successful term matching financing on selected senior loan deals
– Bank lending remains constrained across Europe and high barriers to entry secures a continued compelling investment landscape, especially in senior lending.
– The Company expects to deploy its currently available cash resources to its near term commitments, and if cash resources permit, in some of the potential new deals in the Cheyne pipeline
– Cheyne’s pipeline includes a mix of UK, French and Spanish opportunities, which all offer attractive yields
Summary : Investment Opportunity
Attractive returns from low LTV credit exposure to UK and European commercial real estate assets
• Weighted Average LTV on underlying investments of 62.4% as at 31 March 2022
• Predominantly large, well capitalised, and experienced institutional borrowers
Quarterly dividends delivered consistently since October 2013
• The Company has consistently sought to pay a stable quarterly dividend
• This has led to a stable annualised dividend of around 7% of NAV
Highly granular book
• 63 positions
Transparent and conservative leverage
• Net leverage 14.0% (with £52.8m cash) as at 31 March 2022 versus a leverage limit of 40%
• Access to established real estate investment team at Cheyne, which manages c$5bn AUM
Access to pipeline of enhanced return investment opportunities identified by Cheyne
Robust mitigation against a rising rates environment
• A high yielding portfolio, combined with a short weighted average life of under 2 years, ensures minimal exposure to yield widening and the ability to redeploy quickly at higher rates
Real Estate Credit Investments (LON:RECI) is a closed-ended investment company, incorporated in Guernsey, which originates and invests in real estate debt secured by commercial or residential properties in Western Europe, focusing primarily on the United Kingdom, France and Germany. The Company’s aim is to deliver a stable quarterly dividend with minimal volatility, across economic and credit cycles, through a levered exposure to real estate credit investments.